[ad_1]
Kenyans may pay more to service domestic debt if the Treasury decides to sell bonds by private placement as opposed to open auctions by the Central Bank of Kenya. The country was closed Friday at a meeting with senior ministry officials to explore the possibility of auctioning state bonds.
Treasury bonds have traditionally been auctioned by CBK, which negotiates, sets interest, and accepts favorable bids. Analysts at Cytonn warn that it is risky to place state bonds in the hands of private players, as they are likely to raise interest for selfish gains and even lock ordinary Kenyans
. Kenyans have to dig deeper into pockets to pay off domestic debt, and the CBK is normally negotiating in the best interest of the government, "said Muganda. [02] He however stated that he was good for the treasure of 39, experimenting with different ways of raising funds, noting that government bonds have been subscribed in recent weeks.
The volume of bonds traded decreased for the fourth week in a row. ending on July 5, 2018, compared to 11.4 billion shillings negotiated the previous week and 17.2 billion shillings for the week ended June 13, 2018. This decline may be partly attributed to investors' tendency to invest in the short term. The fiscal year begins, this, according to CBK's weekly bulletin.
"Treasure is simply in a market survey exercise. Let's see what "They will bring to the table," said Muganda
CBK had not commented on the issue at the time of going to press.
CS Henry Treasury At the presentation of the 2018/19 budget, Rotich pledged to borrow more internally to cover the country's budget deficit estimated at 562 billion shillings to protect Kenyans from the high cost of the external debt
. Since last December, the domestic debt is at the same level as the external debt.
CBK places Kenya's domestic value at 2.44 billion shillings in May this year, while external debt is 2.51 billion shillings.
Silent War Between the Treasury and the CBK
The Treasury's plans to engage private actors in the bond market are the latest blows to CBK while the friendly fire between the two government entities is gaining momentum. By hiring private money managers, the Treasury will systematically ousted CBK from the lucrative bond market that normally pays the bank regulator up to 3 billion shillings in agency fees.
On Friday, the PS Kamau Thugge Treasury disputed the claims of CBK Governor Patrick Njoroge that the country's debt is unmanageable, insisting that the country was within reasonable limits
. The PS appeared before the Parliamentary Budget Committee to give the status of the country's debt
At the last Monetary Policy Committee, CBK Governor Patrick Njorog II raised the issue with the draft law on conduct of the financial market, saying that it aims to dilute its regulatory role and that the Treasury has not consulted CBK.
The bill proposes the creation of three additional regulatory bodies in the financial sector.
Source link
